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> Less in global terms, more in local terms. What does that mean? The fact that a currency depreciation can result in higher GDP, doesn't mean it has to. The
by lottin 5y ago
> Less in global terms, more in local terms.
What does that mean? The fact that a currency depreciation can result in higher GDP, doesn't mean it has to. The Turkish lira has been steadily depreciating against every major currency since 2007 and yet Turkey's real GDP is now below its 2007 level. Its current account balance has not only not improved but it's got worse. Nothing suggests that, as a general rule, countries have "strong incentives" to weaken their currencies.
- 3np 5y agoGeneral rule, no. But for certain nations, yes. Those nations just happen to include the global heavyweights.
- lottin 5y agoCan you put a concrete example of a global heavyweight (e.g. a developed nation) that has a strong incentive to weaken its currency?
- 3np 5y agoDid you read the links I provided? Also https://www.investopedia.com/articles/forex/042015/what-currency-war-how-does-it-work.asp https://www.investopedia.com/articles/forex/042015/what-curr...
- lottin 5y agoI read this article, and I fail to see how it supports your claim. Again, can you provide a specific example?
- 3np 5y agoSpecific examples are mentioned and references provided. EU, US, BoE, Mainland China
- lottin 5y agoIt just says that "according to a report in CNBC" in 2019 the BoE, the Fed and ECB were engaged in currency war. It provides zero evidence to back this assertion. At that time, the inflation rate in each and every of these regions, was below 2%, and fell further in 2020 [1]. This is not an example of a country weakening its currency. [1] https://data.oecd.org/price/inflation-cpi.htm https://data.oecd.org/price/inflation-cpi.htm